When speaking with clients about the complicated Medicaid rules, availability, and exceptions, they often reply something like, “Wow, there’s so much to know.”
Clients come to us because we know the rules, and more importantly, we know the exceptions.
Case Study #1:
A client came in about his mother. I had done some basic planning for her a couple of years prior: a power of attorney, healthcare proxy, and a will. He was the only child. He came in for a follow-up meeting because his mom was now in a nursing home for rehabilitation, and he was being told that she would likely not be able to return home. She had about $120,000 in the bank, and he was under the impression (as are most people in this situation) that she was going to lose it all because she hadn’t done anything to protect it.
I explained to him that even in the “eleventh hour,” we would be able to save close to half of what his mom had in the bank. He was thrilled because he came in thinking it was too late and he was going to lose all of her savings.
I instructed him as to what he needed to do, and when we got up from our seats to say our goodbyes, I noticed for the first time that he used a cane. I asked about it, and he replied that he had a bad hip. I then asked if he was on Social Security Disability, and he said he was. I suggested he sit back down because the plan we just discussed was about to change.
There is an exception to the Medicaid transfer penalty rule that says a parent can give any amount money to a child who is on disability, and it’s all protected. Now, because he fit into this exception that not everyone knows about, he was able to save 100% of his mother’s money. It was a complete 180-degree turn in terms of the client’s expectation.
Case Study #2:
Three brothers came in about their mother. She was in rehabilitation and was not going to be able return home. She had almost no money in the bank, but she owned her home. When I was talking to her 3 sons, I could see early on that one of them was just in a different place. He was not with us and had a look of severe worry on his face. I asked him, “What’s going on? I feel like you’re not really here, participating.”
He looked right at me and said, “Frank, my mother’s not coming home. I live with her. We’re going to lose the house. I’m not going to have any place to live. I’m going to be in the street. I don’t know what’s going to happen.”
I asked, “How long have you been living with her?”
He said, “I’ve been living with her for over 30 years.”
I replied, “You’re not going to lose the house. There’s a Medicaid exception that says if you have a child who’s lived with you for at least 2 years immediately prior to going into a nursing home and has provided care, Medicaid will allow you to put your house into that child’s name without any penalty.”
The next day, I went with the 3 brothers to see their mother in the nursing home. She was mentally competent, just physically unwell. She signed the house over to her son the next day, and the house was protected.
The brothers came into my office thinking they were going to lose the house, making one of them homeless, because their mom hadn’t done any planning. By knowing the rules and exceptions, our team was able to save the house for the family.
Although these are examples of how we can help families in crisis, it is always better to plan in advance. You don’t have to worry about knowing all the rules and the exceptions to the rules; that’s why we’re here—just remember you have us. If you need our team as your resource, contact us today.